News in brief: India’s rice output is set to decrease for the first time in eight years, causing concerns that Prime Minister Modi may extend export restrictions, potentially leading to higher global food prices and trade tensions with other rice-exporting countries.
India’s rice output is expected to drop this year for the first time in eight years, according to US Department of Agriculture (USDA) report obtained by Reuters.
This performance has raised concerns that Prime Minister Narendra Modi may extend curbs on exports of the grain to keep food prices ahead of elections.
India is the world’s largest rice exporter, and its exports account for about 40% of global trade. A decline in Indian rice production could have a significant impact on global food prices.
The USDA attributes the expected decline in Indian rice production to a number of factors, including below-average monsoon rains and rising input costs.
Modi’s administration has already taken steps to curb rice exports in an effort to keep food prices under control. In July, the government banned exports of non-basmati white rice. While this ban was subsequently lifted, but the government has imposed a 20% export duty on non-basmati rice.
Analysts believe that the government may extend curbs on rice exports in response to the expected decline in production, which would have a further impact on global food prices.
Therefore, the rest of the world could expect higher rice prices, increased food insecurity as well as trade tensions with other rice-exporting countries as 2023 winds to an end.
